Resorting to Criminal Behaviour: An Economic Perspective

Stephanie Wong

Correctional facilities are supposed to rehabilitate criminals. It should come as a surprise, then, that in 2003 the federal government reported a reconviction rate of 14 per cent for violent crime offenders, and 30 per cent for non-violent crime offenders. It appears that despite the billions of dollars spent by federal and provincial governments to rehabilitate these offenders, some individuals do not successfully reintegrate into society.

Why, exactly, do some choose to recidivate after their release? Sociologists, psychologists, and even economists have explored the complexity of criminal behaviour with an aim to answer this question. Economic conditions, including labour market outcomes and discrimination in the labour market can explain why some individuals choose to engage and re-engage in criminal behaviour.

The Economic Explanation of Criminal Behaviour

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Most would agree that when a crime is committed, the convicted offender must pay “the price”. This price could be a fine, lawyer fees, or even jail time. Most citizens abide by the law because the opportunity cost of engaging in criminal behaviour outweighs the potential economic benefits of the crime. This opportunity cost could mean giving up a stable job with an income. Conversely, criminals tend to have lower opportunity costs, which are outweighed by the potential benefits of the crime. Economists argue that individuals act based on their assessments of the costs and benefits of following or breaking the law, and their likelihood of getting caught.

Discrimination in the Labour Market

Economists have concluded that individuals with scarce access to resources are more likely to engage in criminal behaviour due to their lower opportunity costs. Additionally, individuals with better labour market outcomes such as employment, high wages, and stable durations of employment, have a reduced risk of engaging in criminal behaviour, and less likely to re-offend.

Previous offenders are placed in worse economic positions than they had been prior to their incarceration, making them more likely to resort to criminal behaviour.

It is tempting to argue that policies should improve labour market outcomes to decrease or prevent crime, but the situation is not so simple. Employers are hesitant to hire individuals who have previously been convicted because they are associated with a higher risk of engaging in criminal behaviour. As a result of this stigma, previous offenders are placed in worse economic positions than they had been prior to their incarceration, making them more likely to resort to criminal behaviour once again.

In the United Kingdom, evidence indicates that law abiding citizens are 9.71 per cent more likely to be employed than convicted criminals. While only 48.9 per cent of this differential is attributed to variances in productivity, 51.09 per cent of this differential remains to be unexplained, which implies that discrimination in the labour market exists against convicted criminals.

The complementarity of supply side and demand side policies is needed to have successful and meaningful reintegration into society.

Discrimination in the labour market makes re-integration into society more difficult, and re-offending more attractive. Simply improving labour market outcomes to decrease or prevent crime is not an effective policy solution if it does not account for this discrimination. The federal and provincial government provides skills training and educational programs to inmates, but have no policy solutions to address the discrimination in the labour market. Even if the correctional facilities are successful in rehabilitating offenders, they may choose to re-offend given the bleak economic conditions waiting for them after being released. Despite the necessity of policies to improve the quality of labour supply through educational and skills training programs at correctional facilities, the discrimination on the labour demand side cannot be neglected. The complementarity of supply side and demand side policies is needed to have successful and meaningful reintegration into society.

Stephanie is a Master of Public Policy candidate at the University of Toronto’s School of Public Policy and Governance. She holds a Bachelor of Arts in Economics and Business from the University of Waterloo. Recently, she worked at the Ontario Ministry of Infrastructure and Treasury Board Secretariat where she supported the management of provincial assets across Ontario. Her policy interests include economic policy and the intersection with social policy, infrastructure policy, and food insecurity issues.

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